Common Sense Republican Tax Day Budget

April 15, 2010

Erases $736 Million 2011 Deficit – No Taxes, Smaller Government

HARTFORD – On the last day Connecticut residents have to mail in their tax bills, Legislative Republicans unveiled their 2011 budget that erases the $736 million deficit without raising taxes by consolidating government agencies, shrinking the public workforce, and committing $74 million to stimulate job growth.

The balanced plan [pdf] preserves municipal and school aid, and sets aside $74.5 million to stimulate job growth. Companies that hire the unemployed can earn $17.5 million in tax credits, and the plan establishes a $25 million job creation program and eliminates the Business Entity Tax.

“We must fix the budget hole we face in three weeks without raising taxes and without gutting social service programs. We must make government smaller and do away with programs we can no longer afford. Every household in Connecticut has faced these choices and has made the tough decisions we are confronting today,’’ said House Republican Leader Lawrence F. Cafero Jr. (R-Norwalk).

“The legislature cannot repeat the mistakes of the past two years, when politics and procrastination led Democratic leaders to borrow nearly $1 billion to balance the FY09 deficit. We need to address the FY11 budget crisis responsibly and expeditiously to protect families and businesses from further tax increases,” said Senate Republican Leader John McKinney (R-Fairfield).

“This balanced budget requires everyone to help solve our ongoing fiscal crisis. If we ignore the problems now, they will become insurmountable,’’ Cafero said. He said it offers a flexible menu of choices to create savings from concessions that have all been validated by the non-partisan Office of Fiscal Analysis.

The hallmarks of the savings:

  • $58 million in line item cuts lowering spending to 2009 levels;
  • $64 million in early retirement for state workers;
  • $10 million in state agency consolidations;
  • $6.4 million to shed state office leases;
  • $20 million in privatization of state functions;
  • $150 million in state worker concessions, including wage freezes, furloughs and health care adjustments;
  • $3.8 million in legislative pay cuts and the elimination of franked mail and travel.

The budget also makes significant investments in job creation and retirement security:

  • Appropriates $200 million in previously cancelled contributions to state employee pensions;
  • Elimination of the Business Entity Tax to save companies $32 million;
  • Creation of the Small Business Revolving Loan Fund of $25 million;
  • Tax credits of up to $17.5 million will be available to companies that hire off unemployment rolls.

The Republican leaders said the legislature took the first step toward filling the state’s budget hole on Tuesday when the legislature passed a bill to erase the state budget deficit of $350 million for 2010. The legislature cannot adjourn on May 5 without finishing the job and addressing the $700 million deficit that looms July 1st.

Republicans outlined a variety of small and large potential savings in the state work force. They noted that if all state workers agree to freeze wages for one year it would save $183 million. One furlough day results in a $9 million savings, he noted.

“We cannot walk away from the fiscal crisis that has been created by declining revenues and a refusal to cut spending. More than 100,000 people have lost their jobs in this recession and families are hurting. Raising taxes will not solve the problem and walking away and ignoring what we are facing this summer would be an act of cowardice,’’ Cafero said.

Republican leaders called upon Democrats to immediately come together as we did earlier this week to work toward a reasonable solution.

“We need to get back to work immediately and Republicans will again be at the forefront of efforts to balance the budget without tax increases,” McKinney said. “I hope Democratic leaders have learned over the past two years – the longer we wait to address our fiscal problems, the bigger they get and the more limited our options for dealing with them become.”